Author Topic: Bookstore  (Read 5583 times)

Watchmaker

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Bookstore
« on: February 26, 2020, 09:35:42 AM »
I have a business plan Iím working on right now that Iíd appreciate your feedback on. A bit of background: Iím 1-3 years out from FIRE. Iím thinking through what I am going to do with myself post-FIRE, and one of the things Iím considering is opening a bookstore. Iíve talked about this a bit on my journal if you want a bit more context.

Why have a post-FIRE business?
Iíve always been interested in running a small business. My SO does, my parents did, and Iíve had a few ideas that nearly launched, but my available time and energy has always been a constraint. Also, I think some structure in my post-FIRE days would be healthy.

Why a bookstore?
Chiefly because I love books and can imagine no better place to spend many hours than in a bookstore. Also because I want to do something that improves my community, which think it would really benefit from having a bookstore. Finally, I think owning a bookstore would be a great tool to stay engaged in my interests and an excuse to meet and talk with cool people.

Whatís the goal?

While I wouldnít rely on the business for income to support myself, I absolutely wouldnít want to lose money year after year. Breaking even on all expenses while paying myself *something* would probably be the minimum acceptable performance. Ideally it would be profitable enough to hire at least a part time employee, or one full time employee. Honestly I wouldnít want it to be bigger than that (this isnít a risk Iím concerned about, more on this below).

How is this being funded?
Whatever amount I determine is needed to start the business Iíd save up outside my FIRE number. Under no circumstances would I dip into FIRE money for the business. A significant portion of this money would be recoverable if I close the store.

Arenít bookstores dead?
While the chains have been suffering bad, independent bookstores have been doing pretty well over the last decade.

What are the main concerns?
-Running a business would limit my travel opportunities.
-The Coffee Shop Fallacy (just because you enjoy the product of a business, doesnít mean it will be fun to run the business)
-Poor return on invested money (and time).
-Might hate working retail.
-Long term future for bookstores unclear.

Okay, so whatís the plan?
I live in a small artistsí community in Wisconsin, and Iíd be opening the store here in town. One good thing about this particular town is that real estate is cheap. I live on the main drag and Iíd be looking to buy another building on the same street for the store (putting it in the storefront of my current building isnít an optionómy SO uses it for her business). Most of the places that could work are historic buildings, built between 1850 and 1900. I think I'd be looking for a building with 1,000-1,200 sq ft of retail space, at least 400 sq ft storage, and one second floor apartment. The apartment is to have available for visiting authors- Iíve heard from multiple booksellers that having free housing is a big help for getting authors for signings (virtually all of the buildings that Iíd be looking at have 2nd floor apartments). Many of the buildings that could work have multiple apartments; Iím not opposed to being a landlord, but my ideal would be not to be.

How much will it cost? (These number are really rough right now)

Start-up Costs
100k-300k for the building
50k-100k to retrofit
25k-75k for stock
5k? for marketing
5k website
2k legal and accounting
Total: $187k-487k

Running Costs (annual)
$3000 utilities
$6000 property taxes and insurance
$6000 maintenance
$1200 website
$3000? marketing
Total: $19,200 per year

What might sales look like?
Well, the average American apparently spends $28 dollars on books per year, roughly half on online sales, half in-store. I think I would be the closest bookstore for 75k people, although only 15k or so of them would live within 10 miles of the store. If you capture everyone within that 10 mile ring, in-store sales might be 15,000*$28*50% = $210k. Assuming a gross margin of 40% and $19,200 overhead, that would be a profit of $64,800 before paying myself (and before taxes).

Obviously if you captured something closer to the 75k, that number would get much larger. Likewise, if I only sold books to half of my town (1750 people), that would result in $28*1750*50%=$24.5k in sales, a loss of $9,400 per year.

(The hope would be to capture some portion of online sales as well, but thatís not included above.)

Thoughts? What am I missing? How much should I plan on spending on marketing? Which numbers look wrong to you?
« Last Edit: March 06, 2020, 09:38:46 AM by Watchmaker »

Smokystache

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Re: Bookstore
« Reply #1 on: February 27, 2020, 06:31:59 AM »

What might sales look like?
Well, the average American apparently spends $28 dollars on books per year, roughly half on online sales, half in-store. I think I would be the closest bookstore for 75k people, although only 15k or so of them would live within 10 miles of the store. If you capture everyone within that 10 mile ring, in-store sales might be 15,000*$28*50% = $210k. Assuming a gross margin of 40% and $19,200 overhead, that would be a profit of $64,800 before paying myself (and before taxes).

Obviously if you captured something closer to the 75k, that number would get much larger. Likewise, if I only sold books to half of my town (1750 people), that would result in $28*1750*50%=$24.5k in sales, a loss of $9,400 per year.

First, I applaud your desire to start a local bookstore. I love them and someone has to take the risk.

In my life I've learned the hard way that this (quote above) is not a reliable way to forecast future sales. This is just a few small steps away from saying,
If only 1% of people in my potential market would buy my product, then .01(Y) x Z = PROFIT!  IMHO, the best way to forecast future potential sales is to look at similar businesses. Here's the good news - you now have an excuse to roadtrip to lots of local bookstores in your region. Create relationships with the owners and ask if you can get a general rundown of their books/numbers. Trust the numbers that are exact and listen to the owners who have been able to do it long-term.

The only other advice I would have is that your customers are sacrificing the speed and inventory of Amazon to have a personal experience at a bookstore - so lean heavily into that. Have space for book clubs to meet, have story time, have visiting authors (love the apartment idea), have creative writing classes, have poetry readings - heck, have non-book events (crochet club, Toastmasters meetings, etc.) - in short, emphasize the human experience in your store and try to become a hub where the community comes together.

Oh, and one more thought. You don't mention sales of coffee, tea, snacks, etc.. Many people in this crazy country will never pay $5 for a used book, but will gladly give you that for $.75 worth of coffee beans and hot water. And they'll do it again tomorrow. Keep it simple - you can start with a jar for $2 and a thermos of coffee next to a stack of mugs, but at least have something.  if you could get $50 profit on coffee + snacks every day, you're getting close to  covering your predicted "running costs".

Best of luck!

SeattleCPA

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Re: Bookstore
« Reply #2 on: February 27, 2020, 07:08:12 AM »
I love bookstores. And I'm a book author. Once had a book publishing company. (A little one.) Sell e-books online from my website and a print book at amazon. So I want to be able to give you a green light.

But I'd be a little nervous.

First, I agree with basically everything @Smokystache says. E.g., the comments about how not to predict sales. (One immediate thought I have is that sure people on average buy a book a year... at the airport bookstore when they're waiting for a delayed flight...)

And then I have these sort of additional comments...

1. The cheap space signals danger IMHO. Like expensive houses that are costly because they provide people access to high paid jobs, expensive retail space to me signals lots of shoppers spending lot of money. Inexpensive housing and inexpensive retail space signal the opposite.

2. Profits of $64,800 probably aren't economically adequate. You indicated (and quite reasonably) that you want to have some PT help. That person's hourly wage plus the payroll taxes will really eat into your $64,800. So you're looking at $40K or $50K? Payroll taxes will take $8K to 10K of this. So now it's $30K to $40K? I don't think that's enough of a return to compensate you for the money you've invested in the building, the business and your time.

3. Your $20K overhead seems really low. QuickBooks Online will run you $500 a year. A payroll service like Gusto (for the PT employee) will run you $500 a year. All these "little" expenses will really add up. I would unsurprised if your operating expenses runs $30K to $40K a year.

4. The apartment for visiting authors is a really kind idea. But as someone who's done author tours, I don't think that works. You're now running a free hotel with super low occupancy as a sideline business. There's just no economy of scale here.

5. I think you want to be able to find a profitable bookstore someplace else that's validated your concept. E.g., look at bizbuysell.com and see if someone someplace else has created a little $200K in revenues store that works. If no one else has done this, that's a warning light.

6. FWIW, I think it might make sense to look at amazon's FBA option. I know, I know... that's not what you're envisioning. But real life experience working with book categories and readers would give you valuable tacit knowledge about bookselling.

7. Another FWIW: As a voracious reader I would guess that used books maybe represent an interesting category. I feel like I see in the small towns that dot the foothills east of Seattle a bookstore format that seems to work: used book bookstores.

8. A final comment, just because I think it's maybe relevant... I kind of think it took me about a decade to learn how to truly operate a small CPA firm. That long lag time reflects reality that one needs lots of hard-to-acquire technical and industry knowledge to safely operate. Probably book selling works the same way?

Good luck.

Watchmaker

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Re: Bookstore
« Reply #3 on: February 27, 2020, 08:09:53 AM »
Thank you @Smokystache and @SeattleCPA --just the kind of feedback I was hoping for!

First, I applaud your desire to start a local bookstore. I love them and someone has to take the risk.

In my life I've learned the hard way that this (quote above) is not a reliable way to forecast future sales. This is just a few small steps away from saying,
If only 1% of people in my potential market would buy my product, then .01(Y) x Z = PROFIT!  IMHO, the best way to forecast future potential sales is to look at similar businesses. Here's the good news - you now have an excuse to roadtrip to lots of local bookstores in your region. Create relationships with the owners and ask if you can get a general rundown of their books/numbers. Trust the numbers that are exact and listen to the owners who have been able to do it long-term.

I take your point regarding sales projections, and I wasn't placing much faith in them--as it is they only narrow possible sales down to about two orders of magnitude so I don't even know what they would tell me. The American Booksellers Association publishes a annual financial bookmarking report which I would have access to if I join as a provisional member which should give a better glimpse of real store sales. I like your idea about reaching out/visiting other stores, both to talk with them and to see how they do things. Part of my plan this year (once it warms up) is a tour of Midwest Independent Booksellers Association member stores in my state.
http://www.midwestbooksellers.org/find-a-bookstore.html

The only other advice I would have is that your customers are sacrificing the speed and inventory of Amazon to have a personal experience at a bookstore - so lean heavily into that. Have space for book clubs to meet, have story time, have visiting authors (love the apartment idea), have creative writing classes, have poetry readings - heck, have non-book events (crochet club, Toastmasters meetings, etc.) - in short, emphasize the human experience in your store and try to become a hub where the community comes together.

I completely agree that the experience of the store is critical for a small bookstore. A lot of the value in a local independent store is how they serve as a third place for the community (a community space separate from home and work). I would say I don't want to give up on the argument about whether Amazon is is always the fastest option--firstly because if it's in the store, you can get the book within minutes of wanting it vs two days, and secondly because for those who want to shop online there are some good platforms for faster shipping from indy stores. I won't argue that Amazon is always going to have wider selection and cheaper prices though, so I'd have to offer something (experience, curation, etc) that compensates for that.

Oh, and one more thought. You don't mention sales of coffee, tea, snacks, etc.. Many people in this crazy country will never pay $5 for a used book, but will gladly give you that for $.75 worth of coffee beans and hot water. And they'll do it again tomorrow. Keep it simple - you can start with a jar for $2 and a thermos of coffee next to a stack of mugs, but at least have something.  if you could get $50 profit on coffee + snacks every day, you're getting close to  covering your predicted "running costs".

I knew this would come up, as cafe sales are often a critical part of bookstores revenue. For a couple reasons I don't want to go the full cafe route (chiefly because there are two nice coffee shops on the main street and I don't want to compete with them, I'd rather like to find ways to partner with them. But I think you're right that I have to have something.

Watchmaker

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Re: Bookstore
« Reply #4 on: February 27, 2020, 09:05:31 AM »
I love bookstores. And I'm a book author. Once had a book publishing company. (A little one.) Sell e-books online from my website and a print book at amazon. So I want to be able to give you a green light.

But I'd be a little nervous.
I don't know that I'd trust your advice if you weren't!


First, I agree with basically everything @Smokystache says. E.g., the comments about how not to predict sales. (One immediate thought I have is that sure people on average buy a book a year... at the airport bookstore when they're waiting for a delayed flight...)

I totally take that point and will disregard any nationwide average number for any future projections. The thing about that number that surprised/saddened me was that it was only $28. Compared to what people spend on TV, movies, etc. I think I read that the average american spends $300 a year on sporting events.

And then I have these sort of additional comments...

1. The cheap space signals danger IMHO. Like expensive houses that are costly because they provide people access to high paid jobs, expensive retail space to me signals lots of shoppers spending lot of money. Inexpensive housing and inexpensive retail space signal the opposite.

Yeah, it absolutely isn't a hugely thriving area. There's some mitigation in the local circumstances: the town was much bigger back in the 1800's and there's been a big architectural preservation movement here, so there's a large stock of old commercial buildings relative to the current population, which depresses the prices. I don't view the slowness of the area to be that much of a negative, because I don't honestly want to run a bookstore with $1MM in sales. If someone were to criticize me by saying I just want to play at running a bookstore, they wouldn't be completely wrong. But I don't want to run a bookstore that makes no sales as that's also not a store that's doing anyone else any good. I am also just generally interested in rural development, and I think certain types of businesses in town (a bookstore, a brewery, a bike shop) would really help the whole city economically by bringing in a slightly different set of consumers. 

2. Profits of $64,800 probably aren't economically adequate. You indicated (and quite reasonably) that you want to have some PT help. That person's hourly wage plus the payroll taxes will really eat into your $64,800. So you're looking at $40K or $50K? Payroll taxes will take $8K to 10K of this. So now it's $30K to $40K? I don't think that's enough of a return to compensate you for the money you've invested in the building, the business and your time.

This is where the fact that I'm approaching this from a FIRE perspective changes things for me. I agree that if I needed the money, it would be foolish to spend $200k-500k to "buy" myself a $30-40k job (and so, it's almost certainly a financially sub-optimal decision). But if right now you could guarantee that I'd clear $30k after paying for a PT employee, I'd be super happy with that. Not that I'd need any income from this for FIRE, but that $30k and my SO's income from her business would completely cover our annual spending, so what would be the point in making more anyway?

3. Your $20K overhead seems really low. QuickBooks Online will run you $500 a year. A payroll service like Gusto (for the PT employee) will run you $500 a year. All these "little" expenses will really add up. I would unsurprised if your operating expenses runs $30K to $40K a year.

You're very possibly right. I'd be relying on my mustachian skills to keep this as low as possible, but I don't have any confidence in this number yet.

4. The apartment for visiting authors is a really kind idea. But as someone who's done author tours, I don't think that works. You're now running a free hotel with super low occupancy as a sideline business. There's just no economy of scale here.

This is one area I've actually talked to a couple different booksellers who use this model to good effect. Particularly in rural areas where it can be otherwise difficult to get authors to come on a tour. I've thought about listing it as an Airbnb when not in use by an author. We already do something like this for musicians performing at the local theater and it's worked well for getting bigger acts then we could otherwise.

5. I think you want to be able to find a profitable bookstore someplace else that's validated your concept. E.g., look at bizbuysell.com and see if someone someplace else has created a little $200K in revenues store that works. If no one else has done this, that's a warning light.

This is where I'm hoping the financial benchmarking report from the ABA will be helpful as it is supposed to include profitability and sales numbers for hundreds of independent bookstores. My plan is to pay for access to that sometime later this year.

6. FWIW, I think it might make sense to look at amazon's FBA option. I know, I know... that's not what you're envisioning. But real life experience working with book categories and readers would give you valuable tacit knowledge about bookselling.

No, I think that's a really reasonable suggestion. And I'm not as anti-amazon as I might seem--I think for what their role in the market is, they are great.

7. Another FWIW: As a voracious reader I would guess that used books maybe represent an interesting category. I feel like I see in the small towns that dot the foothills east of Seattle a bookstore format that seems to work: used book bookstores.

I buy a lot of used books myself (my rule is that if the author is alive and will benefit from a new book sale I'll buy new, otherwise I often buy used). I didn't talk about that part, but my plan would be to sell new and used books.

8. A final comment, just because I think it's maybe relevant... I kind of think it took me about a decade to learn how to truly operate a small CPA firm. That long lag time reflects reality that one needs lots of hard-to-acquire technical and industry knowledge to safely operate. Probably book selling works the same way?

I think that's probably quite true. I just have to figure out if I'm fine spending a decade learning how to be a good bookseller.

Thank you again so much for the comments, both of you!
« Last Edit: February 28, 2020, 08:15:09 AM by Watchmaker »

Smokystache

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Re: Bookstore
« Reply #5 on: February 27, 2020, 11:46:18 AM »
Random thought about the apartment after reading @SeattleCPA 's thoughtful responses. Could you create a "artist-in-residence" gig?

Think about a "Author/Artist Wanted Ad" that might look something like this:
Want a quiet place to focus on finishing your book? Author/Artist is provided an apartment in quiet, Anytown for X weeks for free. Get a chance to focus on your book (paint, write your poetry, etc.) for X weeks! Finish that novel! Start that screenplay! You pay for your own food and purchases. In exchange for no rent, you agree to teach 3 weekly 90-minute classes on agreed upon topics. Previous classes include "Starting Your Science Fiction Novel," "Poetry for Beginners," Write a Novel in a Month Group (for teens, for retirees, for ....), Watercolor for beginnings, Advanced Watercolor techniques, etc. Applications should be sent to...


I know many aspiring or less experienced authors/artists who would jump at a chance to get to focus on their craft - they might be able to swing their food & expenses, but a place to stay is always the most costly part of it. This way you might get even more value out of the artist/author and for a relatively limited time-cost (e.g., teaching about 6 hours a week in my example), they get to focus on their craft for a while in a new location.

Random thought worth exactly what you paid for it. =)

BicycleB

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Re: Bookstore
« Reply #6 on: February 27, 2020, 12:07:21 PM »
I know almost nothing about this niche, will just offer the one story I have of it.

My friend from high school started a bookstore in our hometown. This was after the internet came but not long after. He ran it for close to a decade, folding roughly at the dawn of the social media era IIRC. No coffee, no used books. Moderately highbrow selection.  Our town has 20,000+ population and is anchored by a university; this was the one non-university bookstore within 75 miles. Overall area population higher than yours but not wildly so.

My rare visit home came in the middle of his run. He was barely above the level of paying his expenses. From context, I suspect there were years when his girlfriend of the time paid for the couple's cost of living; he was not FI. I do think there were times when he paid a part time clerk so that he had a 40-50 week instead of a 60 hour one, but he remarked the hours were often long. At about the 10 year mark when SeattleCPA finished learning to run his firm, Friend resignedly closed the shop. I happened to visit again about that time, after he decided on closure and set a date but before the door closing day. Without specifying numbers, he seemed to say that the best years hadn't quite made a living wage, while the typical years were indeed barely above breaking even. In other words, what he paid himself had apparently fluctuated between zero and slightly above minimum wage.  He seemed to think that after closing, he wouldn't be in significant debt, but would emerge with little if any of whatever capital he'd put in.

Really nice guy. He went on to teach in public schools for a while in another town.

Watchmaker

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Re: Bookstore
« Reply #7 on: February 28, 2020, 07:59:25 AM »
Random thought about the apartment after reading @SeattleCPA 's thoughtful responses. Could you create a "artist-in-residence" gig?

Think about a "Author/Artist Wanted Ad" that might look something like this:
Want a quiet place to focus on finishing your book? Author/Artist is provided an apartment in quiet, Anytown for X weeks for free. Get a chance to focus on your book (paint, write your poetry, etc.) for X weeks! Finish that novel! Start that screenplay! You pay for your own food and purchases. In exchange for no rent, you agree to teach 3 weekly 90-minute classes on agreed upon topics. Previous classes include "Starting Your Science Fiction Novel," "Poetry for Beginners," Write a Novel in a Month Group (for teens, for retirees, for ....), Watercolor for beginnings, Advanced Watercolor techniques, etc. Applications should be sent to...


I know many aspiring or less experienced authors/artists who would jump at a chance to get to focus on their craft - they might be able to swing their food & expenses, but a place to stay is always the most costly part of it. This way you might get even more value out of the artist/author and for a relatively limited time-cost (e.g., teaching about 6 hours a week in my example), they get to focus on their craft for a while in a new location.

Random thought worth exactly what you paid for it. =)

I like this idea. There's actually an art school in town that does various artist residences, maybe I could collaborate with them.

Watchmaker

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Re: Bookstore
« Reply #8 on: February 28, 2020, 08:04:13 AM »
I do think there were times when he paid a part time clerk so that he had a 40-50 week instead of a 60 hour one, but he remarked the hours were often long.

This is one thing several people have mentioned in other places--the hours. I'm not against spending long hours in the store, but I don't want to working hard 60 hours a week. My hope is if the store is slow I can use that time to do bookkeeping/other tasks (or even other hobbies), and that if it's not slow it will make enough money for me to hire help.

On a related note, what hours would you want an independent bookstore to be open?

Watchmaker

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Re: Bookstore
« Reply #9 on: February 28, 2020, 09:22:40 AM »
5. I think you want to be able to find a profitable bookstore someplace else that's validated your concept. E.g., look at bizbuysell.com and see if someone someplace else has created a little $200K in revenues store that works. If no one else has done this, that's a warning light.

Thanks for the suggestion to look at BizBuySell. I found 12 book selling businesses currently listed.  For those that listed gross revenue, they ranged from $199,000 to $712,000 (excluding one internet seller with $8MM), with an average of $340,000. Average cash flow of $70,000 (ranging from $40,000 to $100,000)(one didn't report cash flow, so presumable low/zero/negative).



stream26

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Re: Bookstore
« Reply #10 on: February 28, 2020, 09:38:59 AM »
Honestly, most bookstores aren't just bookstores anymore. Most of them sell gift-y type items that make them more of a destination/one-stop shop. I think that was the reason the independent bookstore my sister used to work at flourished. The main reason people came were for the books, sure, but then they could also buy trinkets, print cards, etc. It also had a coffee/wine bar in it, so that was a draw as well.
« Last Edit: March 01, 2020, 12:52:15 PM by stream26 »

robartsd

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Re: Bookstore
« Reply #11 on: February 28, 2020, 11:04:34 AM »
On a related note, what hours would you want an independent bookstore to be open?
I think a significant portion of your customers would want hours that work around their 9-5 jobs, so you'd probably need to be prepared to forego many activities that occur in the evening or on weekends. You can probably afford to be closed one or two weekdays each week (or open late in the morning or close for long lunches), though you will need to be mindful of delivery/shipping schedules when you set your hours.

Watchmaker

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Re: Bookstore
« Reply #12 on: February 28, 2020, 11:38:11 AM »
though you will need to be mindful of delivery/shipping schedules when you set your hours.

I don't know that I would have thought of that detail. Thanks!

Watchmaker

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Re: Bookstore
« Reply #13 on: February 28, 2020, 12:47:34 PM »
Honestly, most bookstores aren't just bookstores anymore. Most of them sell gift-y type items that make them more of a destination/one-stop shop. I think that was the reason the independent bookstore my sister used to work at flourished. The main reason people came were for the books, sure, but then they could also buy trinkets, print cards, etc. It also had a coffee/wine bar in it, so that was a draw as well.

Yep, sidelines are definitely an important part of many bookstore's sales. Cafe, paper goods, gifts, etc. I sort of skirted this issue in my earlier posts, but I have the potential problem that I'm unexcited about selling most sidelines. Because I don't want to run those businesses, and because all of the typical sidelines I've seen bookstores sell are already available in my town at other shops, shops I want to compliment rather than compete with.

JLR

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Re: Bookstore
« Reply #14 on: February 28, 2020, 11:38:50 PM »
Airbnb sounds interesting. Look into The Open Book in Wigtown, Scotland. They rent the store out by the week for people to run it. Apparently they are booked out years in advance. It something I would live to do!

Malcat

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Re: Bookstore
« Reply #15 on: February 29, 2020, 06:03:16 AM »
As someone whose parents have owned stores in small artsy communities, I would take a completely different approach than a traditional bookstore, which is remarkably limiting.

What is it about the image of a bookstore that you want to achieve? A community hub where people come to talk to you about books? Where you can engage writers?

You don't need to open a brick and mortar bookstore for that if you don't want everything that comes with being a shop owner who has to maintain an enormous amount of stock, where you will have to spend an inordinate amount of time talking to boring people about truly terrible books. 

You could focus far more on the engagement of talent while creating a community space for people to showcase their work, not dissimilar to MMM HQ.

If you don't need the business to be maximally successful, then you can afford to think outside the box.

Even if you started with a small pop-up book shop where you feature small, curated collections of books along different themes with each pop-up, you could get a feel for the retail book experience in your community without being married to a brick and mortar and inventory situation right off the bat. 

BicycleB

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Re: Bookstore
« Reply #16 on: March 01, 2020, 09:08:00 PM »
^That sounds like Malvern Books in my city!

I'm not sure if that's how the owner views it, but definitely there's a focus on community events, especially author readings. Multiple times per month, authors present books, answer questions, etc. I've gone to see one author and found four others, including big names, chatting avidly beforehand.

The store is 75% space and has a surprisingly small number of bookshelves. As in, some shelves on the walls and only a couple other rows of shelves. The meeting/presentation space, not the shelves, dominates the store's area.

http://malvernbooks.com/2020/02/

norajean

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Re: Bookstore
« Reply #17 on: March 01, 2020, 09:27:59 PM »
I would do it only as a hobby and only if you could afford losses. Could you partner with a coffee shop? These days bookstores need coffee, treats, plenty of places to sit and work or read, etc. Any way you could lure in hapless tourists?

BicycleB

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Re: Bookstore
« Reply #18 on: March 01, 2020, 09:35:27 PM »
^What great ideas from @Malkynn and @norajean!

Why open a bookstore when half of what you want to do is support the other businesses? Why not partner with them by offering to arrange author readings, book kiosks, book clubs, art shows, etc in the existing coffee shops and art galleries?

And maybe find a local Airbnb (or person with Airbnb-like space) to offer residency housing on special occasions without actually owning that space yourself either?

You could limit your hours, do the fun stuff, let others do the boring stuff. Plus you'd maximize the positive impact on the other local businesses instead of diluting their traffic.

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Re: Bookstore
« Reply #19 on: March 02, 2020, 04:34:40 AM »

What are the main concerns?
-Running a business would limit my travel opportunities.
-The Coffee Shop Fallacy (just because you enjoy the product of a business, doesnít mean it will be fun to run the business)
-...
-Might hate working retail.
-...
Why don't you take the first couple of years of FIRE to combine travelling with learning about the business. You've already mentioned getting in touch with other independent bookshops so just expand that idea to include other countries where you might find somewhere that you could work/intern at for a few weeks or months. That would at least give you an idea of whether you like the actual day-to-day of bookselling as well as exposing you to lots of different ways of doing it.

I know there are a lot of independent bookshops in Ireland (here's an article with 35 of the best), there are several English bookshops in Germany, there's Shakespeare & Co. in Paris and I'm sure there are many in other countries, too. If you have any other language skills then you're not restricted to just English-language shops either.

It depends on what kind of travelling you want to do and where. Is your SO planning on keeping on with their business after you FIRE and what impact does that have on travel plans anyway?

Watchmaker

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Re: Bookstore
« Reply #20 on: March 02, 2020, 07:19:42 AM »
Airbnb sounds interesting. Look into The Open Book in Wigtown, Scotland. They rent the store out by the week for people to run it. Apparently they are booked out years in advance. It something I would live to do!

I'm familiar with it-- never been there but I've seen pictures and I love the aesthetic of the place.

Watchmaker

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Re: Bookstore
« Reply #21 on: March 02, 2020, 07:35:13 AM »
As someone whose parents have owned stores in small artsy communities, I would take a completely different approach than a traditional bookstore, which is remarkably limiting.

What is it about the image of a bookstore that you want to achieve? A community hub where people come to talk to you about books? Where you can engage writers?

You don't need to open a brick and mortar bookstore for that if you don't want everything that comes with being a shop owner who has to maintain an enormous amount of stock, nowhere you will have to spend an inordinate amount of time talking to boring people about truly terrible books. 

You could focus far more on the engagement of talent while creating a community space for people to showcase their work, not dissimilar to MMM HQ.

If you don't need the business to be maximally successful, then you can afford to think outside the box.

Even if you started with a small pop-up book shop where you feature small, curated collections of books along different themes with each pop-up, you could get a feel for the retail book experience in your community without being married to a brick and mortar and inventory situation right off the bat.

These are great thoughts and questions. A pop-up book shop appears to be a really common way to enter the business. I subscribe to an industry newsletter which mentions new store openings--Id say full half of the announcements are pop-ups or pop-ups converting to permanent stores. That's an option for me; I have a couple places and events where I could do a pop-up bookstore. Admittedly, I don't like pop-up shops, which has colored my take on the idea somewhat.

Regarding the idea of re-imaging what the business is, I'll have to come back when I've got more time to type (and have also thought about your and others comments more).

Watchmaker

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Re: Bookstore
« Reply #22 on: March 02, 2020, 03:48:39 PM »
Why don't you take the first couple of years of FIRE to combine travelling with learning about the business. You've already mentioned getting in touch with other independent bookshops so just expand that idea to include other countries where you might find somewhere that you could work/intern at for a few weeks or months. That would at least give you an idea of whether you like the actual day-to-day of bookselling as well as exposing you to lots of different ways of doing it.

I know there are a lot of independent bookshops in Ireland (here's an article with 35 of the best), there are several English bookshops in Germany, there's Shakespeare & Co. in Paris and I'm sure there are many in other countries, too. If you have any other language skills then you're not restricted to just English-language shops either.

It depends on what kind of travelling you want to do and where. Is your SO planning on keeping on with their business after you FIRE and what impact does that have on travel plans anyway?

I like this idea a lot, except I don't think I'd like full time traveling. Our plan in FIRE has been to travel more, but to still keep in to one month at a time (or something). We both love to travel, but we both often find ourselves missing home after a few weeks (now, I could be wrong about this--maybe we'd love longer travel in FIRE). But I could imagine spending stints at different bookstores all around the world (they call this staging in the culinary world).

SO is going to keep up the business. It is easy for her to reduce working hours or take extended breaks, but she intends to do this job for the foreseeable future.

Watchmaker

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Re: Bookstore
« Reply #23 on: March 02, 2020, 04:00:47 PM »
I would do it only as a hobby and only if you could afford losses. Could you partner with a coffee shop? These days bookstores need coffee, treats, plenty of places to sit and work or read, etc. Any way you could lure in hapless tourists?

I'd absolutely, 100% only do this with money I could afford to lose (which I do not have at this point). And though I could certainly be accused of approaching this like a hobby, I don't think that's the right way for me to think about it. If I just wanted a bigger personal library to fill up with books in my retirement, I could have that. For the bookstore to be the thing I want it to be, it needs to touch a lot of peoples lives... which you could roughly measure in sales. So I want it to be successful, not for monetary gain, but to have the impact I desire. Which, I think, means treating it like a business and not a hobby.


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Re: Bookstore
« Reply #24 on: March 02, 2020, 04:23:01 PM »
What is it about the image of a bookstore that you want to achieve? A community hub where people come to talk to you about books? Where you can engage writers?

You don't need to open a brick and mortar bookstore for that if you don't want everything that comes with being a shop owner who has to maintain an enormous amount of stock, where you will have to spend an inordinate amount of time talking to boring people about truly terrible books. 

You could limit your hours, do the fun stuff, let others do the boring stuff. Plus you'd maximize the positive impact on the other local businesses instead of diluting their traffic.

I think there's a lot of wisdom in these comments, but I'm not sure if being a literary-event-organizer (or whatever you might call it) is the part of this I'm really drawn to. I kind of think I want to be the shop owner "maintaining the stock", doing the "boring stuff".

When I think about a pop-up shop, or organizing literary events in other community spaces, it sounds...okay. But the thing I dream about is a bookstore with narrow aisles and high shelves, packed with a hundred lifetimes worth of good books waiting to be read. Now, am I just in love with the daydream, and not the reality? Very possibly.
 
This is all super helpful conversation.

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Re: Bookstore
« Reply #25 on: March 02, 2020, 04:36:05 PM »


Arenít bookstores dead?
While the chains have been suffering bad, independent bookstores have been doing pretty well over the last decade.



On what is this based?  I am aware of several community bookstores that have closed in the last few years, many of which were opened for many years. 

To me, the key thing would be finding a way to differentiate yourself and compete with Amazon. I don't think that the personal touch and local experience of an independent book store is enough, based on the many of those I've seen close recently.   I'm not sure what that looks like. 

Book delivery, maybe? 

Perhaps readers' advisory services?  I think many people struggle with what to read.  This is a service offered by some libraries but could be done more in depth in a small store.  Of course, you'd need someone trained and knowledgable enough to do it, though a subscription to NoveList would be enough for limited services.  There's a store in Bath, England that I dream of visiting (assuming it's still in business ;) ) that does this.

Kids' activities?  Lots or work and you'd need space, but parents around me are desperate for things to do with their kids.  While they are there for story time or crafting or a STEAM activity, they might grab a few books.

Or perhaps setting up and maintaining several Free Little Library spaces in your community might scratch the itch, at a much lower potential cost?  Or that, combined with volunteering at your local library? 


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Re: Bookstore
« Reply #26 on: March 02, 2020, 04:45:41 PM »
On what is this based?  I am aware of several community bookstores that have closed in the last few years, many of which were opened for many years. 

See, for example:
https://www.nytimes.com/2019/06/23/business/independent-bookstores.html
https://abcnews.go.com/Business/wireStory/indie-booksellers-persevere-amazon-rising-costs-67656831

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Re: Bookstore
« Reply #27 on: March 02, 2020, 04:52:55 PM »
On what is this based?  I am aware of several community bookstores that have closed in the last few years, many of which were opened for many years. 

See, for example:
https://www.nytimes.com/2019/06/23/business/independent-bookstores.html
https://abcnews.go.com/Business/wireStory/indie-booksellers-persevere-amazon-rising-costs-67656831

The ABC article (couldn't load NYT) doesn't seem to paint a picture I would call "doing quite well".  Stores are needing to sell clothes, games, toys, food and coffee, and other items to stay afloat, for example. 

It definitely paints a picture of a very challenging business, though the business is less challenging than it was a few years ago.

"Still, independent book selling remains a low-margin and challenging business. Owners who sell toys and gifts do so because those items are more profitable than books; there's more price flexibility with non-book merchandise because publishers print the maximum price on dust jackets. Some shops have installed cafes, making their stores more inviting. These features became popular with the growth of the now-defunct Borders chain, and Barnes & Noble includes them in its stores."

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Re: Bookstore
« Reply #28 on: March 03, 2020, 05:32:19 AM »
What is it about the image of a bookstore that you want to achieve? A community hub where people come to talk to you about books? Where you can engage writers?

You don't need to open a brick and mortar bookstore for that if you don't want everything that comes with being a shop owner who has to maintain an enormous amount of stock, where you will have to spend an inordinate amount of time talking to boring people about truly terrible books. 

You could limit your hours, do the fun stuff, let others do the boring stuff. Plus you'd maximize the positive impact on the other local businesses instead of diluting their traffic.

I think there's a lot of wisdom in these comments, but I'm not sure if being a literary-event-organizer (or whatever you might call it) is the part of this I'm really drawn to. I kind of think I want to be the shop owner "maintaining the stock", doing the "boring stuff".

When I think about a pop-up shop, or organizing literary events in other community spaces, it sounds...okay. But the thing I dream about is a bookstore with narrow aisles and high shelves, packed with a hundred lifetimes worth of good books waiting to be read. Now, am I just in love with the daydream, and not the reality? Very possibly.
 
This is all super helpful conversation.

Then I strongly, STRONGLY recommend that you put in some time working retail at a book store. If that's not possible, then any kind of retail will do, and be very eye opening.

You talk about wanting to spend your days among books, but that's not at all what retail is about. Retail is about sales, merchandising, and engaging your community.

It's also largely about talking to annoying people about things that you think are stupid.

I mean, there's no way you love books in general, there are A LOT of shit books out there, and a lot of that shit will make up a huge proportion of your demand. You can't just carry the books you like, and you also need to be able to market and promote the books you don't like.

This means you need to be up on the latest book trends, know which shit books are hot right now so that you know what and how much to order.

Examine your love of "books" and figure out what it actually means to you. No one universally loves books, that's just nonsense. People like the books they like. I love books, but would probably rather poke my own eyes out than read 90% of them.

However, if what you are passionate about is *reading* and engaging the people in your community to love reading, then that motivation fits, but that's also where it would also make sense to be motivated to do community engagement activities and events.

So I'm having a really hard time resolving what it is you actually want from the concept of opening a brick and mortar retail store. I can firmly tell you this: retail is 90% dealing with customers and 10% about what you are actually selling.

I'm really not trying to burst your bubble, I'm just not getting from you an indication that you would actually enjoy the reality of owning a store, and it's a huge investment that can very very easily be lost when there's that much inventory involved.

Maybe this is the right move for you, but definitely flesh out the vision, deconstruct the motivations behind it, and make sure that the actual outcome aligns with your goals.

Otherwise, you could accidentally end up buying yourself a stressful and demanding career that you hate and can't just walk away from.

Try retail, try volunteering at the library, try running a book club, try organizing a book reading at a local venue. Try all of these things, figure out what you love and what you hate, and then craft your best plan from there.

Watchmaker

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Re: Bookstore
« Reply #29 on: March 03, 2020, 08:34:40 AM »
The ABC article (couldn't load NYT) doesn't seem to paint a picture I would call "doing quite well".  Stores are needing to sell clothes, games, toys, food and coffee, and other items to stay afloat, for example. 

It definitely paints a picture of a very challenging business, though the business is less challenging than it was a few years ago.

"Still, independent book selling remains a low-margin and challenging business. Owners who sell toys and gifts do so because those items are more profitable than books; there's more price flexibility with non-book merchandise because publishers print the maximum price on dust jackets. Some shops have installed cafes, making their stores more inviting. These features became popular with the growth of the now-defunct Borders chain, and Barnes & Noble includes them in its stores."

From the NYT article-
Over the last few years, the number of independent bookstores has increased by about 50% (from the 2009 low of 1,600 stores). The average independent bookstore is profitable. E-book sales are declining. Bookstore sales have been climbing well above inflation for the last 5 years. Non-book merchandise is an important part of those sales (from another article it looks like non-book merch is 5% of sales, but a larger proportion of margin). Margins are thin: the top 1/3 of performing stores average 8.8% profit.

Now, I'm not trying to convince anyone that bookstores are doing fantastic. Most of independent bookstores gains over the last decade can be attributed to the collapse of the chain stores, not an overall market increase or taking market from Amazon. But they're not dying off.



Watchmaker

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Re: Bookstore
« Reply #30 on: March 03, 2020, 08:53:54 AM »
Then I strongly, STRONGLY recommend that you put in some time working retail at a book store. If that's not possible, then any kind of retail will do, and be very eye opening.

Absolutely. In fact, I've already talked with the owner of another store in town and I'm going to work the counter for them some time this year. Their store is a letterpress shop that sells pens, pencils, notebooks, etc, so the customer base should be pretty similar to a bookstore, I would think.


You talk about wanting to spend your days among books, but that's not at all what retail is about. Retail is about sales, merchandising, and engaging your community.

It's also largely about talking to annoying people about things that you think are stupid.

Maybe it's a difference in personality, or maybe it's simply my naivete, but I don't think of conversations with people that way. If someone is interested in a subject, I presume there's something worthy of interest there, and I'm excited to hear about it from them.

I mean, there's no way you love books in general, there are A LOT of shit books out there, and a lot of that shit will make up a huge proportion of your demand. You can't just carry the books you like, and you also need to be able to market and promote the books you don't like.

Of course I don't like all books, but I do like pretty much all types of books. I can't imagine not being able to find some point of mutual interest with someone who shops in a local bookstore.

I'm really not trying to burst your bubble, I'm just not getting from you an indication that you would actually enjoy the reality of owning a store, and it's a huge investment that can very very easily be lost when there's that much inventory involved.

I truly appreciate this kind of feedback--that's why I'm posting here. And I think you are perfectly correct that I need to examine my desires and motivations more--the questions you all have is helping me do that.

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Re: Bookstore
« Reply #31 on: March 03, 2020, 09:27:07 AM »
Then I strongly, STRONGLY recommend that you put in some time working retail at a book store. If that's not possible, then any kind of retail will do, and be very eye opening.

Absolutely. In fact, I've already talked with the owner of another store in town and I'm going to work the counter for them some time this year. Their store is a letterpress shop that sells pens, pencils, notebooks, etc, so the customer base should be pretty similar to a bookstore, I would think.

Excellent idea, that will give you great insight and experience.


You talk about wanting to spend your days among books, but that's not at all what retail is about. Retail is about sales, merchandising, and engaging your community.

It's also largely about talking to annoying people about things that you think are stupid.

Maybe it's a difference in personality, or maybe it's simply my naivete, but I don't think of conversations with people that way. If someone is interested in a subject, I presume there's something worthy of interest there, and I'm excited to hear about it from them.

Either you are being of true and pure love of humankind, or you've never worked retail.

All joking aside, no, not every subject is worth discussing, and you will be shocked about how many people just want someone to talk to about their casual racism.

I have a patient who very comfortably will open conversations with me about "the problem with feminists".

Incidentally that leads to another point that many of the conversations you will have in retail will have nothing to do with books.

More than half of the conversations I have at work have nothing to do with anything medical. People like to talk about all sorts of things.

That was my father's favourite part of owning a store, chatting with people about whatever, especially local political issues.


I mean, there's no way you love books in general, there are A LOT of shit books out there, and a lot of that shit will make up a huge proportion of your demand. You can't just carry the books you like, and you also need to be able to market and promote the books you don't like.

Of course I don't like all books, but I do like pretty much all types of books. I can't imagine not being able to find some point of mutual interest with someone who shops in a local bookstore.

For the most part, yes, your customers will be perfectly pleasant book loving people. And if you are able to get in on the hype about absolute garbage like Fifty Shades of Grey, then you are far less of a literary snob than I am.

I'm really not trying to burst your bubble, I'm just not getting from you an indication that you would actually enjoy the reality of owning a store, and it's a huge investment that can very very easily be lost when there's that much inventory involved.

I truly appreciate this kind of feedback--that's why I'm posting here. And I think you are perfectly correct that I need to examine my desires and motivations more--the questions you all have is helping me do that.

Again, very much not trying to discourage you, I'm trying to help flex your thinking into areas you may want to contemplate.

My parents have owned small businesses my entire life, mostly small retail stores, so I have a pretty jaded perspective and ran as far as I could from that life, so most of my personal perspectives on it are negative.

I would have been very wealthy by now had I taken over my father's store, but I have no regrets running away from it.
That's my personal bias though, which comes out in my comments, but is in no way a belief that others wouldn't enjoy that life.

Watchmaker

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Re: Bookstore
« Reply #32 on: March 03, 2020, 10:03:47 AM »
Either you are being of true and pure love of humankind, or you've never worked retail.
Ha!

All joking aside, no, not every subject is worth discussing, and you will be shocked about how many people just want someone to talk to about their casual racism.

I have a patient who very comfortably will open conversations with me about "the problem with feminists".

Incidentally that leads to another point that many of the conversations you will have in retail will have nothing to do with books.

More than half of the conversations I have at work have nothing to do with anything medical. People like to talk about all sorts of things.
Yeah, I get a lot of casual racist and sexist talk in my current job (rural area, manufacturing). I wouldn't say I enjoy it, but I do get some satisfaction trying to correct/debate/educate.

Again, very much not trying to discourage you, I'm trying to help flex your thinking into areas you may want to contemplate.

My parents have owned small businesses my entire life, mostly small retail stores, so I have a pretty jaded perspective and ran as far as I could from that life, so most of my personal perspectives on it are negative.

I would have been very wealthy by now had I taken over my father's store, but I have no regrets running away from it.
That's my personal bias though, which comes out in my comments, but is in no way a belief that others wouldn't enjoy that life.

My parents had a small business that was a continual struggle, which they eventually gave up. This strongly turned me against the idea of self-employment--at least for money I needed, but I seemingly still have the itch to be a business owner. My SO is incredibly happy with her business though, so I've had that positive example for the last decade.

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Re: Bookstore
« Reply #33 on: March 03, 2020, 10:36:54 AM »
Either you are being of true and pure love of humankind, or you've never worked retail.
Ha!

All joking aside, no, not every subject is worth discussing, and you will be shocked about how many people just want someone to talk to about their casual racism.

I have a patient who very comfortably will open conversations with me about "the problem with feminists".

Incidentally that leads to another point that many of the conversations you will have in retail will have nothing to do with books.

More than half of the conversations I have at work have nothing to do with anything medical. People like to talk about all sorts of things.
Yeah, I get a lot of casual racist and sexist talk in my current job (rural area, manufacturing). I wouldn't say I enjoy it, but I do get some satisfaction trying to correct/debate/educate.

Again, very much not trying to discourage you, I'm trying to help flex your thinking into areas you may want to contemplate.

My parents have owned small businesses my entire life, mostly small retail stores, so I have a pretty jaded perspective and ran as far as I could from that life, so most of my personal perspectives on it are negative.

I would have been very wealthy by now had I taken over my father's store, but I have no regrets running away from it.
That's my personal bias though, which comes out in my comments, but is in no way a belief that others wouldn't enjoy that life.

My parents had a small business that was a continual struggle, which they eventually gave up. This strongly turned me against the idea of self-employment--at least for money I needed, but I seemingly still have the itch to be a business owner. My SO is incredibly happy with her business though, so I've had that positive example for the last decade.

Incidentally, my parents were very successful and absolutely loved their business. I'm the one who hated it, but I'm still self employed in other ways, I just really try to avoid a lot of overhead because it really messes with flexibility.

I work in an extremely high overhead industry (over 70% is normal) so I've developed somewhat of an allergy to overhead costs.

Another point is that brick and mortar stores either thrive or fail, they're either successful or they aren't. So it's nice that you don't need it to make you a lot of money, that takes off a lot of pressure, but it also takes away a lot of the motivation to hustle and make it work, and you will have quite a bit of capital on the line.

Last year I walked away from a business because it was either boom or bust. I stood to make A LOT of money, but I don't need a lot of money, so I just wasn't motivated to put in the hustle I needed to do to hit critical mass. It was kind of all or nothing, and I certainly didn't have the stomach for all so I chose nothing.

Do some market research and see what kind of numbers you would need to maintain in order to stay afloat. What kind of hours that would involve, and would you have to work on holidays (probably yes).

Watchmaker

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Re: Bookstore
« Reply #34 on: March 03, 2020, 10:52:52 AM »
Another point is that brick and mortar stores either thrive or fail, they're either successful or they aren't. So it's nice that you don't need it to make you a lot of money, that takes off a lot of pressure, but it also takes away a lot of the motivation to hustle and make it work, and you will have quite a bit of capital on the line.

That's a big question I have at the moment--do I want to put in the time and energy this will take? I don't know yet. Given that no one can answer that question for me, I might try to steer this conversation (which has been great) back towards financial aspects.


Villanelle

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Re: Bookstore
« Reply #35 on: March 03, 2020, 03:55:19 PM »
The ABC article (couldn't load NYT) doesn't seem to paint a picture I would call "doing quite well".  Stores are needing to sell clothes, games, toys, food and coffee, and other items to stay afloat, for example. 

It definitely paints a picture of a very challenging business, though the business is less challenging than it was a few years ago.

"Still, independent book selling remains a low-margin and challenging business. Owners who sell toys and gifts do so because those items are more profitable than books; there's more price flexibility with non-book merchandise because publishers print the maximum price on dust jackets. Some shops have installed cafes, making their stores more inviting. These features became popular with the growth of the now-defunct Borders chain, and Barnes & Noble includes them in its stores."

From the NYT article-
Over the last few years, the number of independent bookstores has increased by about 50% (from the 2009 low of 1,600 stores). The average independent bookstore is profitable. E-book sales are declining. Bookstore sales have been climbing well above inflation for the last 5 years. Non-book merchandise is an important part of those sales (from another article it looks like non-book merch is 5% of sales, but a larger proportion of margin). Margins are thin: the top 1/3 of performing stores average 8.8% profit.

Now, I'm not trying to convince anyone that bookstores are doing fantastic. Most of independent bookstores gains over the last decade can be attributed to the collapse of the chain stores, not an overall market increase or taking market from Amazon. But they're not dying off.

Yes.  Bookstores can be successful.  By carrying non-book materials.  You seem motivated by a love of books, but the articles seems to support that fact that to be successful, you are going to need to carry toys or coffee or shirts or greeting cards or whatever.  Likely several of those things. 

Also, you mentioned that you get some satisfaction from trying to correct or debate bigoted viewpoints.  The problem with retail is that the customer is always right.  If you suggest to the guy buying XYZ racist's bio that racism isn't great, most likely he isn't going to appreciate the engagement and enjoy the debate.  He's going to be offended and you are going to lose his business.  And he's going to post on various Facebook groups about how you were pushy and inappropriate (in his opinion) and everyone should avoid shopping at Watchmaker's Book Emporium. 

Also, how many independent book stores are in your area?

Watchmaker

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Re: Bookstore
« Reply #36 on: March 03, 2020, 08:05:40 PM »
Yes.  Bookstores can be successful.  By carrying non-book materials.  You seem motivated by a love of books, but the articles seems to support that fact that to be successful, you are going to need to carry toys or coffee or shirts or greeting cards or whatever.  Likely several of those things.
But what does successful mean this case, if I don't have a financial need to maximize profits? If success means makes enough to cover overhead, that might be completely achievable without sidelines. Or not.
 
Also, you mentioned that you get some satisfaction from trying to correct or debate bigoted viewpoints.  The problem with retail is that the customer is always right.  If you suggest to the guy buying XYZ racist's bio that racism isn't great, most likely he isn't going to appreciate the engagement and enjoy the debate.  He's going to be offended and you are going to lose his business.  And he's going to post on various Facebook groups about how you were pushy and inappropriate (in his opinion) and everyone should avoid shopping at Watchmaker's Book Emporium. 
Much about this business idea worries me, but I have to say the above just isn't one of my concerns. Chiefly because I'm just too damn charming for anyone to get mad at me. ;)

Also, how many independent book stores are in your area?
There was one in town until about three years ago when the owner died. The next closest is 30 miles away, there's one 40 miles away, one 45 miles away (in a different direction), and then a bunch as you'd be able to get to a couple reasonably sized cities at that point.

Gagnante

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Re: Bookstore
« Reply #37 on: March 04, 2020, 12:02:23 AM »
I may have missed something, but going back to your early posts with projections of ongoing costs, where is the annual cost for restocking?  Presumably you are selling your inventory to generate your income, but that inventory needs to be replaced, and your initial $25-75K isn't going to carry you for long.  Others have pointed out staffing costs, software costs, etc, but for me this is the big elephant in the room.

Malcat

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Re: Bookstore
« Reply #38 on: March 04, 2020, 04:07:14 AM »
I may have missed something, but going back to your early posts with projections of ongoing costs, where is the annual cost for restocking?  Presumably you are selling your inventory to generate your income, but that inventory needs to be replaced, and your initial $25-75K isn't going to carry you for long.  Others have pointed out staffing costs, software costs, etc, but for me this is the big elephant in the room.

That, and you can't expect all of your initial stock to sell either.

Watchmaker

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Re: Bookstore
« Reply #39 on: March 04, 2020, 07:51:56 AM »
I may have missed something, but going back to your early posts with projections of ongoing costs, where is the annual cost for restocking?  Presumably you are selling your inventory to generate your income, but that inventory needs to be replaced, and your initial $25-75K isn't going to carry you for long.  Others have pointed out staffing costs, software costs, etc, but for me this is the big elephant in the room.

I didn't mention that since it's an operating cost, not overhead (I should have labeled my sections better--the "running costs" above were overhead). For new book sales, the cost of goods sold will be somewhat less than 60% of the selling price (hence the 40% gross margin I used above). So the cost of new inventory (assuming total inventory is stable) is already included in the numbers above--it's the difference between the gross sales and gross profit above.

**I am not an accountant, I'm sure I'm misusing terms left and right. Learning the proper language to use for this is one of my to-dos.**

That, and you can't expect all of your initial stock to sell either.

One of the interesting things about the book world is that, in most cases, bookstores can return unsold books to the publisher for a full refund.

Watchmaker

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Re: Bookstore
« Reply #40 on: March 04, 2020, 07:58:33 AM »
I didn't mention that since it's an operating cost, not overhead (I should have labeled my sections better--the "running costs" above were overhead). For new book sales, the cost of goods sold will be somewhat less than 60% of the selling price (hence the 40% gross margin I used above). So the cost of new inventory (assuming total inventory is stable) is already included in the numbers above--it's the difference between the gross sales and gross profit above.

Another way to think about it--

For every $20 dollar book sold, $12 is going to buy the book which replaces it on the shelf. Overhead costs (labor, building, marketing, etc) come out of the remaining $8 dollars. The  best performing 1/3rd of independent bookstores might have $1.8 left over as profit after overhead (so their overhead works out to $6.2 per $20 book). 

lhamo

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Re: Bookstore
« Reply #41 on: March 04, 2020, 08:18:17 AM »
Here is another model you might want to have a look at -- they sell a mixture of new and used books and are attached to community spaces with food vendors, etc.  One of their branches has a branch of the public library in the same building, but they still seem to sell enough books (and other stuff) to

https://www.thirdplacebooks.com/

My main concern for you is that the local population is just too small to sustain a physical bookstore.  I love books but rarely buy them any more, especially new ones -- get my supply from the library for the most part.

Is there a particular niche you are interested in?  Drilling down on becoming one of THE places to go for both used and new books in a certain sector might be one way to differentiate yourself.  But  most of that business would be online.  This is the store I sold much of my academic collection to back in the day (2003) -- they seem to still be going strong.  The margin on scholarly books is probably higher than average, though, as they tend to have limited print runs/go out of print sooner, and there is a ready supply from academics who jump off the track early, cant afford to move large physical collections when they are bouncing from one adjunct/visiting prof gig to another, or retire:

https://www.midtownscholar.com/


PoutineLover

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Re: Bookstore
« Reply #42 on: March 04, 2020, 08:39:18 AM »
As a reader, I love the idea of opening a bookstore, especially in a place that doesn't have one already. I live in an urban centre with lots of them, so it would be pretty hard to capture a large part of the market, but in my city there are several independent bookstores that seem to be doing well. The used bookstore near me is close to a university so they sell lots of textbooks, and they also have an enormous selection of books. Every so often they post a list of books in high demand that they are looking to buy. They seem to be surviving, and only have 2 staff members (one is probably the owner, the other could be his son but I don't know for sure). I always buy from their 50cent rack, so I don't give them tons of business but it's a way for them to generate interest and make some money on books that aren't selling otherwise.
I love books, but I hardly ever buy new books, because I go to the library or I buy cheap used books. I think it's a good idea to have social activities or side things to sell in your bookstore, like nice stationery, cards, or even local art (doubling as decoration, rotated on a certain schedule). And providing social opportunities like book clubs (with a deal on the book of the month), readings, workshops etc. If you want to benefit local shops nearby, partner up to offer coffee or baked goods at your events. Something interesting could be skill share classes, where someone comes in to teach something to a group. If you have a good community and lots of traffic, that would probably be good for sales.
I don't think your dream is impossible, but I think you should spend a lot more time fleshing out how you'd like to see it go, what would be your target customer, and visiting and speaking to lots of people in the business to get a sense of the market.

DeepEllumStache

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Re: Bookstore
« Reply #43 on: March 04, 2020, 09:42:18 AM »
I love bookstores and it likely could be a wonderful business if you find your niche. From a financial standpoint, be wary of the accounting and cash flows.

With overhead being a mostly fixed cost (excluding marketing), you're going to need a minimum amount of sales before you're making profits. Make sure your overhead estimates include ongoing accounting and legal costs.

Using your example (where you're only selling $20 books with $12 of each book going to COGS, leaving $8/book to cover overhead/profits) you'd need to sell 2,400 books a year to cover $19.2K in annual overhead. Your $1.80/book bottom line doesn't kick in until your 3,097th sale in this example. If you're selling cheaper $8-10 paperbacks, the quantity will increase. And that's before you add any employees.

Cash flows also tend to sink businesses. Most retail industries are heavily seasonal. November and December will be your most important months for cash inflow but your outflows are going to be spread over the year. You'll be better off than most since you'll have more of a cushion, but it's a good thing to plan for. It also makes the logistics of taking a vacation in that timeframe, especially the last six weeks of the year, really tough.

Watchmaker

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Re: Bookstore
« Reply #44 on: March 04, 2020, 11:05:31 AM »
Here is another model you might want to have a look at -- they sell a mixture of new and used books and are attached to community spaces with food vendors, etc.  One of their branches has a branch of the public library in the same building, but they still seem to sell enough books (and other stuff) to

https://www.thirdplacebooks.com/
I've been to one of the Third Place stores (don't remember which one right now)--it was a nice space. And I really like the name.

My main concern for you is that the local population is just too small to sustain a physical bookstore.  I love books but rarely buy them any more, especially new ones -- get my supply from the library for the most part.
Yes. Fundamentally I suspect the area is too low population to support a "real" bookstore. And I probably don't want to work as hard as I would have to if I ran a "real" bookstore. I suppose what I'm wondering is if I can scale owning a bookstore down to the equivalent of a part-time job. But not actually part-time, because I think I'll willing to be there for quite a lot of hours, more like part-effort (i.e. I'm okay with long hours as long as they are mostly slow times).

Is there a particular niche you are interested in?  Drilling down on becoming one of THE places to go for both used and new books in a certain sector might be one way to differentiate yourself.
While I'd want to be a general service bookstore, I do have an area of expertise/specialization I'd have a particular focus on---though, as you say, that might be reflected more in the online business.

Watchmaker

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Re: Bookstore
« Reply #45 on: March 04, 2020, 11:07:28 AM »
Something interesting could be skill share classes, where someone comes in to teach something to a group. If you have a good community and lots of traffic, that would probably be good for sales.

Unrelated to any of this, I've also been planning on trying to get a skill sharing group started. They can be so much fun.

Watchmaker

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Re: Bookstore
« Reply #46 on: March 04, 2020, 11:10:06 AM »
With overhead being a mostly fixed cost (excluding marketing), you're going to need a minimum amount of sales before you're making profits. Make sure your overhead estimates include ongoing accounting and legal costs.

Using your example (where you're only selling $20 books with $12 of each book going to COGS, leaving $8/book to cover overhead/profits) you'd need to sell 2,400 books a year to cover $19.2K in annual overhead. Your $1.80/book bottom line doesn't kick in until your 3,097th sale in this example. If you're selling cheaper $8-10 paperbacks, the quantity will increase. And that's before you add any employees.

Yes, that's a good reminder not to just think of things as average values.

Missy B

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Re: Bookstore
« Reply #47 on: March 04, 2020, 11:55:56 PM »
I'm enjoying reading these and rooting for you, Watchmaker.
Re forecasting and the $28 average spend... remember that your customer base is *not* the average american. They are readers. The average American reads and buys one book a year, usually the 'in' book in hardcover.

I read a thing where they split readers into 3 categories - bargain, (middle, don't remember) and premium. Bargain readers are super price sensitive and read a lot. (think romance readers who go through 5 books a week, every week) Premium aren't so price sensitive - they make good money and mind more having their time wasted by a book than their money. They can easily spend $200 a month on books.

The ABA probably has more info on that stuff - I understand they are a super resource for booksellers, well worth the membership.

In terms of the suggestion to have people coming for a writing getaway and teach at the same time...a visiting writer will not be able to do both these things well. They will not have a writing retreat if they are teaching. It takes a lot of bandwidth and energy to hold class well, not to mention curriculum, prep time, and reading student's writing. 6 hours class could be 3 times that for the teacher, easily.

ABC123

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Re: Bookstore
« Reply #48 on: March 05, 2020, 11:55:52 AM »
I wonder if you could get kids' birthday parties to book with you.  You read a few books to them, and have some activities based around the stories, something like that.  I would have loved that as a kid, but admittedly I was not your average kid.  Or expanding book clubs to the middle school age might bring in a new crowd.  Or even older elementary.  Most book clubs are for adults only.

I am definitely in the "bargain" reader category.  I make very good use of the library - both physical and e-library.  I love to look through a good bookstore, but rarely buy anything.  Not sure what part of Wisconsin you are in, but I would love to visit when I am up there visiting my family, if you end up going into business.

Villanelle

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Re: Bookstore
« Reply #49 on: March 05, 2020, 02:22:10 PM »
I wonder if you could get kids' birthday parties to book with you.  You read a few books to them, and have some activities based around the stories, something like that.  I would have loved that as a kid, but admittedly I was not your average kid.  Or expanding book clubs to the middle school age might bring in a new crowd.  Or even older elementary.  Most book clubs are for adults only.

I am definitely in the "bargain" reader category.  I make very good use of the library - both physical and e-library.  I love to look through a good bookstore, but rarely buy anything.  Not sure what part of Wisconsin you are in, but I would love to visit when I am up there visiting my family, if you end up going into business.

When I was regularly volunteering that the library at my last location, the children's story times were insanely popular.  The volunteer who ran them went all out and put so much time and effort into them.  They got so popular that the library added additional times and I think even had to set limits and cut off access to prevent overcrowding. 

She used puppets and other props and often didn't even read the books at all.  Something like that would surely bring in parents.  Whether they would spend money or not, I don't know.  And you'd need a fairly sizable space to do them, space that didn't have revenue-generating merchandise in it.  But a very good story-teller brings in people.  She also had people request her for paid gigs at parties. 

Oh, and I mentioned my dream book store Readers' Advisory service earlier.  Here's the link.  They call it a book spa and given that it's book 6 months in advance, it seems to be doing well.  Again, this would require a certain level of expertise (and/or paid subscriptions to Novelist and probably a couple other similar services is you are relying on mostly that to generate recommendations), but given that "I don't know what to read" is a common reason people give for not reading, it might generate a lot of business.  And if you can make an an experience, that's all the more true and you can make money on it beyond just the sales of recommnended books. 

This place charges 80 pounds and that includes 55 in credit toward purchases, 5 toward future visits, and a few items from the store-branded merch. 

https://mrbsemporium.com/gifts/#reading-spas